China\'s gold demand to reach 750 tonnes this year

Strong demand in investment and jewelry will drive China\'s total gold demand to 750 tonnes this year, the World Gold Council (WGC) said here Thursday. Buying gold as means of investment has become a more common choice for Chinese in the past third quarter as it is viewed as a safe investment during these uncertain economic times, said the WGC in its Gold Demand Trends report for the third quarter of 2011. Demand for gold bars and coins in China expanded by 24 percent from a year earlier to 60.2 tonnes in the third quarter. In the first nine months, total investment demand reached 204.1 tonnes, said Zheng Lianghao, managing director of the WGC\'s Far East division. Meanwhile, Chinese gold jewelry demand was 13 percent higher year-on-year at 131 tonnes as retail chains expanded their networks in smaller cities to meet increasing demand fuelled by rising income levels, said Zheng. This compares to a global demand of 465.6 tonnes jewelry in the third quarter, down 10 percent year-on-year. Globally, gold investment demand reached 468.1 tonnes in the third quarter of 2011, up 33 percent from 352.1 tonnes in the corresponding quarter in 2010. \"Unsurprisingly investment demand for gold was a key driver during the third quarter,\" said Marcus Grubb, Managing Director of Investment. \"Increasing levels of inflation, the U.S. credit rating downgrade, a worsening eurozone sovereign debt crisis and the lackluster performance of many assets drove investors to increase holdings in gold in order to protect their wealth,\" he said. He said investors are likely to continue to seek protection from economic uncertainty, which shows no signs of abating. Global gold demand in the third quarter of 2011 increased 6 percent year-on-year to reach 1,053.9 tonnes, up from 991.1 tonnes in the third quarter of 2010, according to the WGC. Gold supply was 1,034.4 tonnes in the third quarter of 2011, 2 percent higher than year-earlier levels of 1,013.0 tonnes, it said.